Layoff number exaggerated, IT industry is a net hirer of people: Nasscom

There is a gentle deceleration in net new hiring growth rate and the emphasis is shifting from scale to skills, said Nasscom.Surabhi Agarwal | ET Bureau | May 19, 2017, 08:55 IST

Calling the 56,000 number of expected layoffs in the “grossly exaggerated”, IT industry body Nasscom on Thursday said that the sector which is aiming for $350 billion of exports by 2025 has been a net creator of jobs.

Acknowledging that increasing automation may eat up a section of the jobs, but new areas such as Cybersecurity, Internet of Things (IoT), robotics, artificial intelligence, machine learning etc are creating new job opportunities. It also sent out a strong message to the workforce of “reskill or perish” in the new domain areas to be relevant and employable.

“There is a gentle deceleration in net new hiring growth rate and the emphasis is shifting from scale to skills,” said Nasscom president R Chandrashekhar. The industry added close to net 1,70,000 people in the last fiscal and expects to add upwards of 1,50,000 in the current fiscal. “Automation is a fact of life,” added Chandrashekhar.

“Workforce realignment is common to any industry and is a part of the regular exercise of yearly performance appraisal processes which only impacts 0.5-3% of the overall IT talent pool,” said Nasscom. The range works out to be between 20,000 to 1,20,000 people.

Over the last month, reports have surfaced about top Indian companies such as Cognizant, Wipro laying off thousands of employees. According to some estimates, the top four Indian IT services companies may let go 12,000- 15,000 employees in the coming months. Companies have denied these reports and Nasscom said that the layoff are part of the annual appraisal process and are performance related.

In the same breath however, Nasscom and the industry executives present from companies such as Cognizant, Wipro, Mindtree and Tech Mahindra reiterated that employees at the entry level and especially at the mid and senior level should retrain themselves in the new technologies in order to save themselves from the axe.

“The need for re-skilling talent is a reality that we have to address. To keep up in a fast-evolving technology environment, the IT industry must reinvent itself by re- skilling its employees in new and upcoming technologies,” said Raman Roy, chairman of Nasscom.

The industry which has revenues of $154 billion currently employs close to 3.9 million people and is hoping to create 2.5 million to 3 million new jobs by 2025. Nasscom also said that 50% of the workforce has already been skilled in new technologies and the body is looking at new programmes to skill more employees.

The executives refuted the accusation that the industry is letting go of people in the 5-15 years of experience to hire freshers who come at a cheaper cost.

"If your experience turns into insights, you will be in demand in the industry. If your experience turns to baggage, then you may have a cause for worry," said Bhanu BM, COO of Wipro Technologies. Rustow Ravanan, CEO of MindTree added that the industry can’t do with just freshers and needs people with experience to win and services the new business.

With the focus on non-linear growth and new models such as platforms and digital, the headcount growth is being delineated from the revenue growth.

“Last year we showed that IT grew at over 8% but employment grew at only 5%,” said CP Gurnani, managing director and CEO of Tech Mahindra adding that this number could further change in the future.

Ramkumar R, SVP at Cognizant, which has been rumoured to have laid off over 6,000 people said that there are no layoffs in the company. “We don't know from where the 6,000 layoffs number came from. There are only performance management measures. Cognizant hired 1000s of people just in the March quarter,” he added